Will they ever converge: Earnings of immigrant and Canadian-born workers over
the last two decades
Marc Frenette and René Morissette
Business
and Labour Market Analysis Division
Analytical Studies Branch research paper
series, No. 215
Context
The convergence of earnings of immigrants
to those of Canadian-born workers is a relevant policy issue since it has implications
for earnings inequality, poverty dynamics and social cohesion.
Objective
This
paper attempts to answer the following questions:
Will today's recent immigrant
achieve earnings parity with Canadian-born workers less rapidly than earlier cohorts?
What outcomes are necessary to achieve earnings convergence with Canadian-born
workers in the coming years?
Findings
Despite
a massive increase in their educational attainment, recent immigrant men employed
on a full-year, full-time basis saw their real earnings fall 7% on average from
1980 to 2000. During the same period, the real earnings of Canadian-born men went
up 7%. Earnings of recent immigrant women rose over the period, but not as quickly
as among Canadian-born women.
As a result, the gap between the pay rates
of recent immigrant men and those of their Canadian-born counterparts has widened
substantially.
This growing gap suggests that unless they experience a
marked improvement in their earnings in the near future, male immigrants who arrived
during the late 1990s will need more time than their predecessors to achieve earnings
parity with Canadian-born workers.
While the factors underlying the growing
earnings gap between recent immigrants and their Canadian-born counterparts are
still largely unknown, some explanations can be ruled out: these include diverging
changes in educational attainment, the performance of the Canadian labour market
in 1980 and 2000, and changes in the age structure of recent immigrants
Real
earnings of young Canadian-born men have also dropped substantially during this
period. This suggests that the problems faced by recent immigrant men may not
be unique to them. Rather, they may have an impact on all new entrants to the
Canadian labour market, whether or not they are born in Canada.
Since the
poorer performance of recent immigrants was observed mainly among prime-aged workers,
problems faced by recent immigrants appear to affect mainly individuals with substantial
foreign work experience.
Data Source : Census Data, 1980-2000.
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